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The pseudocertainty effect is a cognitive bias identified in decision-making, where individuals perceive outcomes as certain despite their inherent uncertainty in multi-stage decision processes. This bias leads to a focus on outcomes in later decisions while disregarding the uncertainty and conditions established in earlier stages.
Example
In a two-stage decision problem, participants preferred a guaranteed win of $30 over an 80% chance to win $45, even though the latter had a higher expected value, demonstrating the pseudocertainty effect in action.
How to overcome this bias
Acknowledge and evaluate the uncertainty at all stages of a decision-making process rather than focusing solely on later options.